This stage of market shaping exercise is perhaps the most vital of all areas and will also be the main bulk of the work to be undertaken.

The research phase will establish:

Who: Who you need to contact in public and private sector organisations that are the prime demanders for market services. Also, the suppliers, the main industry bodies, potential new entrants and key public sector policy makers/implementers.

What: What data these contacts will be able to provide. Supply and demand information is relatively self-explanatory information to capture. Other key information that may effect your market could be held by less likely contacts. 

Where: Where these contacts will / can be found. Demand and supply contacts can easily be established by contacting relevant public bodies or trade associations. For contacts that are less obvious, asking the question "Is there anyone you believe I should be talking to?" when making contact with demand and supply stakeholders is a proven method of finding links.

When: What are the regulatory deadlines (e.g. EU Landfill Directive for waste)? Is there planning underway for significant projects with a major impact on the market (e.g. winning the Olympic bid extended the horizons to beyond 2012).

You will also need to undertake further desk research into underlying market issues that will be of importance. These may include legislative impacts and funding issues. Additional issues will arise as you establish contacts in your market.

From your research you will be looking to established the following:

Market shaping activity (demand side) - focuses on developing a baseline of demand side requirements through a data collection exercise with significant public sector demanders as identified in the scoping phase, storage and analysis of this data. 

Market shaping activity (supply side) - includes identifying barriers to market entry, market creation and data collection on the existing supply base. In particular it will look at competition issues and include an assessment of the capacity gap in relation to meeting demand side requirements (including those of the private sector).

Demand and supply matching - develop scenarios for better strategic management of the market and demand and supply matching activity. For the construction and waste markets, this will involve workshops with demand side, key industry players and academics. Workshops can help to inform final market shaping proposals including opportunities for aggregation, collaboration and intervention.  An objective is to publish high- level public sector demand data to inform both the public sector and industry and enable early decision-making and business planning.

Supplier intelligence - obtaining and maintaining supplier intelligence including financial status and market share.  This could include one or more industry surveys.

Procurement routes - this will involve identifying any procurement related barriers currently faced by projects and developing a strategy to address these.

Private sector - research into private sector demanders within this market.    

Who else has done something similar?

It is imperative that there is an awareness of similar activities being executed or planned by other bodies. Key lessons can be combined with your market shaping if this has already occurred or a joined up initiative can be synchronised if one is planned.

If a combined approach is adopted, other bodies may have input into market issues that could have been overlooked during the scoping of your market. Also, the amount of data requests to key market players can be significantly reduced by this synchronisation.

Bodies that may have undertaken or are planning work in your market:

• Academia: Many universities / colleges etc have specialist schools that focus on particular markets, examples include the University of Bath's Centre for Research in Strategic Purchasing and Supply (Crisps) and the University of Loughborough's European Construction institute. These bodies often undertake independent research that can feed into market shaping. The representatives of academic bodies will also have a good understanding of your chosen market and can provide relevant contacts for your data collection exercise. 
• Other Public organisations: Be aware of similar activity being undertaken by other public sector bodies, these may include central government, local authorities and the nine Regional Centres of Excellence. 
• Consultancies: Consultancies regularly undertake studies, which may relate to your market. Data is recorded and reports are often published that may be able to feed into your study. Consultancies can provide a useful source of experience and may be able to inform your research. 
• Trade Associations / organisations: Trade associations hold a vast amount of data on key industry figures. They have networks of suppliers and will be able to provide contacts to these companies. They may also be able to inform you of similar activity/ data requests coming from other bodies. Trade associations exist for most markets and many can be found using the Trade Association Forum supported by the DTI. Also, Internet searches can provide information on market sectors trade associations if the trade association forum does not hold any information you require. 
• Other countries: Other countries may have undertaken some market shaping work in your chosen market. Although this information may offer an insight into the processes undertaken, the desired outcomes of the work may differ and should only be considered if you are looking for an international perspective. This approach would be particularly useful if for instance you are viewing other countries activities in response to a European Directive, looking at suppliers capacity to meet public sectors demand levels and in turn meeting targets set by directives.

Suppliers' perspective

To only take the public sector view of the market place is to have a very one-sided perspective. Hence, the GEMS process includes involvement of the supply-side as key stakeholders.

Process(es) identification

The market will be characterised by processes that suppliers use to ensure they can meet the demands being placed upon them by their customers. They will also manage their supply-chain through, in some cases, processes that have developed over a number of years. These will not always be optimal. There may exist an opportunity to challenge existing practices and processes and assist in the design of more effective ones.

By obtaining a good understanding of the processes in the market you may see how they can be re- designed and optimised to the benefit of all those involved.

Information gathering

The data gathering process will be a staggered process coinciding with the identification of stakeholders. Once stakeholders have been identified, engaged and relationships are built, the data gathering process can take place. The data that is supplied by your stakeholders will not all be in an identical form. Data can be standardised and verified by the providers but you must be sure the data you will be collecting is robust and fit for purpose. This means that you need to ensure there is enough information to draw meaningful conclusions. This can be achieved by developing an understanding of the issues surrounding acquisition, provision, collection, interpretation and currency of your data.

Be prepared to justify why you are collecting this data. Refer to benefits realisation section in Making a Case for Market Shaping.

Demand side data
Data will be collected on the current and projected demand for the market's services from predominantly the public sector but also the private sector where this may have an impact on supply levels.

You will need to plan this phase carefully since there are many important factors to consider - who owns the data; how complete, comprehensive and reliable it might be; what use you can make of it; whether it can be made public (in your report); ease of collection; its importance to the study. So, for the Construction market the plan focused on the key major departments' construction plans; for Waste, over 300 local authorities in England were surveyed to establish the capacity shortfall in the context of the landfill targets and hence the potential for fines.

Key information will be over a given number of years (the further ahead the date provider can look the better).

A questionnaire is the principal method for collecting demand profile data. 'Buy-in' to completing the questionnaire should be secured in advance and publicly endorsed from top management.

Qualitative data can also be collected and may include case studies detailing how the procurement was run, lessons learned, changing policy affecting demand, etc.

A questionnaire is the best method for data collection if you are aware of the information you want to collect. If you are unaware of the data available, one to one interviews will help to establish this either face to face or via the telephone.

Once these interviews have been conducted and information is collected in the form it is currently in, all data can be standardised into a set template.

The private sector may also significantly affect the levels of demand for certain industry where the public sector is not the sole customer. Examples include the construction industry where the private sector is using construction companies on large build projects including supermarkets, airport terminals etc all of which may have an impact on the ability to meet the demand levels of the public sector.
To obtain an understanding of where the private sector projects will originate it is recommended you view trade publications but also to engage with the industry on a one to one basis.

Supply side data
The information provided by the supply side will tend to be qualitative and commercially sensitive. It will inform you of suppliers' ability to meet current levels of demand and will include the suppliers public / private sector business levels and the capacity to take on additional business.

There are a number of tools that can be utilised to collect this data with views on the following being sought.

• Number and size of suppliers within various market sectors; 
• Market share; 
• Details of current operations within the market, i.e. number of contracts, value, duration, type of financing, and any other meaningful variables etc; 
• Barriers to entry facing suppliers, including legislative/regulative constraints, capacity issues, process constraints and bid costs; 
• Typical criteria considered before deciding whether or not to bid - identifying which are the most attractive opportunities, whether these come from public or private sector customers.

Supplier workshops can be a useful way of teasing out the various issues and considerations that either encourage or dissuade a supplier from bidding in the market. Suppliers often have their own ideas about how the opportunities, processes, legislation and financing processes can be made more attractive and these ideas should be listened to and openly discussed. All three of OGC's markets used these to great effect and these formed the basis for ongoing engagement with suppliers in the design and application of the market shaping approach.

Joint workshops can be very useful. By bringing both suppliers and procurers together they can concentrate on early supplier communications and highlight a variety of issues on both sides that have hindered the procurement of services.

Supplementary one to one interviews with suppliers can help identify issues that may not emerge in the open forum of a workshop. These were particularly useful for the Kelly waste market study.

See the Benefits section to note the selling points that will encourage suppliers to provide the information required for this exercise.

On concluding your data collection from suppliers, be aware of what would be classed as "new entrants". These are established companies that are looking to expand into new markets and will add extra capacity. It will quite often be the case that links exist between two markets.